Upskilling refers to the strategic development of existing competencies to prepare employees for new job requirements. Unlike reskilling (complete retraining), upskilling builds on existing skills. According to the World Economic Forum, 77% of employers worldwide plan to actively upskill their workforce by 2030—a response to the growing skill gap driven by digitalization and AI.

Definition: What is Upskilling?

Upskilling (from "up" = upward and "skill" = ability) describes the process of expanding or deepening employees' existing professional competencies. The goal: enabling them to take on more demanding tasks or keep pace with new technologies and working methods.

Unlike traditional professional development, upskilling is strategically oriented. It's not just about imparting knowledge, but specifically developing those skills relevant to future requirements. These so-called Future Skills encompass both technical competencies (such as data analysis or AI application) and transferable skills like analytical thinking or adaptability.

Upskilling vs. Reskilling vs. Cross-Skilling

These terms are often confused but describe different development approaches.

The Differences at a Glance

Upskilling means deepening or expanding existing skills within one's own field. For example, an HR specialist learns to use HR analytics tools to make data-driven decisions.

Reskilling, on the other hand, refers to complete retraining for a new field of work. A production worker might qualify as an IT support specialist because their previous role is being eliminated through automation.

Cross-skilling (also called multiskilling) extends competencies beyond one's own specialty into adjacent areas. A recruiter acquires basic employer branding knowledge to better understand cross-functional interfaces.

When Each Approach Makes Sense

Upskilling is appropriate when employees remain in their current role but face new requirements. Reskilling becomes relevant when entire job categories become obsolete due to technological change. Cross-skilling promotes collaboration between departments and makes teams more flexible.

Why Upskilling Matters: The Skill Gap and Future Skills

The need for upskilling has never been greater. Three key drivers make it indispensable for organizations.

The Skill Gap in Companies

According to a McKinsey & Company study, 87% of companies worldwide already have a skill gap or expect one in the coming years. The World Economic Forum's Future of Jobs Report 2025 quantifies this further: if the global workforce consisted of 100 people, 59 of them would need training by 2030.

For Germany specifically, the Future Skills Framework by Stifterverband and McKinsey estimates a need for around 700,000 additional technology specialists over the next five years. Additionally, over 2.4 million employees need to be trained in key competencies such as agile working and digital collaboration.

Digitalization and AI as Drivers

The rapid development of Artificial Intelligence is fundamentally changing job profiles. According to the WEF, 86% of surveyed employers identify AI as a significant factor influencing their business models by 2030. The fastest-growing skills are correspondingly technology-related: AI, big data, cybersecurity, and network technologies.

At the same time, human skills remain indispensable. Analytical thinking, cognitive flexibility, learning agility, resilience, and collaboration are among the core competencies that no technology can replace.

Benefits for Organizations and Employees

For organizations, upskilling is often more cost-effective than external hiring. Practice shows that internal development is faster and strengthens company culture. Additionally, employee retention increases: according to LinkedIn, 74% of employees want to learn new skills to remain employable.

Employees benefit from greater job security, better career opportunities, and a stronger sense of purpose. 77% confirm that learning new skills gives them a sense of meaning and fulfillment.

Upskilling Methods and Measures

The range of upskilling formats is extensive. What matters most is that they fit the organizational culture and individual learning preferences.

Formal Training and Certifications

Traditional courses, seminars, and certificate programs provide structured knowledge. They're particularly suited for clearly defined skill gaps—for instance, when a team needs fundamentals in data analysis or project management methodologies. Advantage: recognized credentials as proof. Disadvantage: often time-intensive and not very individualized.

On-the-Job Training and Mentoring

Learning in the daily work environment is particularly effective because it has direct practical relevance. Job rotation, stretch assignments (more challenging tasks), or shadowing experienced colleagues enable employees to apply new skills immediately. Mentoring programs additionally provide personal guidance and feedback.

Digital Learning Formats and E-Learning

Digital learning platforms make upskilling accessible regardless of time and location. Microlearning units (short learning modules of 5-15 minutes) integrate well into daily work routines. According to the Hays HR Report, companies are increasingly using AI-powered learning recommendations that generate individual learning paths based on existing competencies.

Implementing Upskilling Successfully: Tips for HR

For upskilling programs to actually deliver results, more than just training offerings are needed. Three success factors are critical.

Conduct a Skill Gap Analysis

The first step is a systematic inventory: What competencies exist, which ones will be needed in the future? A competency model helps define requirement profiles and compare them with the current skills of the workforce. Important: The analysis should be repeated regularly, as requirements change quickly.

Identify Potential Objectively

Not every employee has the same learning potential in all areas. Objective diagnostics can help identify individual strengths and development potential—beyond self-assessments or subjective manager evaluations. Scientifically validated assessments measure cognitive abilities and personality traits relevant to successful learning. Based on this, tailored development plans can be created.

Design Individual Learning Paths

One-size-fits-all approaches frequently fail. Successful upskilling programs account for different learning styles, prior knowledge, and career goals. Integration into daily operations is also important: employees need time and space to learn—and managers who actively support development rather than merely tolerating it.

Frequently Asked Questions About Upskilling

What is upskilling?

Upskilling refers to the strategic development of existing professional skills to meet new requirements. It builds on existing competencies and prepares employees for more demanding tasks or technological changes.

What is the difference between upskilling and reskilling?

Upskilling deepens or expands existing skills within the same professional field. Reskilling is complete retraining for a new area of work—for example, when a previous role is eliminated through automation.

Why is upskilling important for organizations?

87% of companies worldwide have or expect a skill gap. Upskilling is often more cost-effective than external hiring, strengthens employee retention, and ensures competitiveness through an agile, future-ready workforce.

What upskilling measures are available?

Common formats include formal training and certifications, on-the-job training and job rotation, mentoring and coaching programs, as well as digital learning formats like e-learning and microlearning.

How do I identify my employees' upskilling needs?

Through a systematic skill gap analysis: create competency profiles, compare them with future requirements, and use objective potential assessments. Employee conversations and self-assessments complement the picture.

How many employees need to be upskilled by 2030?

According to the World Economic Forum, 59% of the global workforce will need training by 2030. In Germany, approximately 700,000 additional technology specialists are required. Without upskilling, 11% of employees face medium-term redundancy.

What skills are developed through upskilling?

Technology skills like AI, big data, and cybersecurity are growing fastest. At the same time, soft skills remain essential: analytical thinking, collaboration, resilience, and adaptability are among the core competencies of the future.

Conclusion

Upskilling is no longer optional—it's a strategic necessity. With 77% of employers planning to actively develop their workforce, the direction is clear: organizations that invest in upskilling secure competitive advantages—through competent employees, lower turnover, and greater innovation capability.

For HR, this means: systematically analyze skill gaps, objectively identify learning potential, and enable individual development paths. The technology for this exists—now it's about consistent implementation.

Want to objectively identify potential in your team and plan development measures more effectively? Learn more about data-driven potential analysis with the Aivy platform

Sources

• World Economic Forum. Future of Jobs Report 2025. January 2025.
  https://www.weforum.org/publications/the-future-of-jobs-report-2025/
• Stifterverband + McKinsey & Company. Future Skills: Which Skills Are Lacking in Germany. December 2025.
  https://www.stifterverband.org/medien/future-skills-welche-kompetenzen-in-deutschland-fehlen
• Hays AG + Institute for Employment and Employability (IBE). HR Report: Upskilling and Reskilling in Organizations. 2025.
  https://www.hays.de/lp/hr-report/upskilling-und-reskilling-in-unternehmen
• World Economic Forum. Reskilling Revolution Initiative. 2024.